Forward Looking Information - EVS Broadcast Equipment€¦ · forward-looking information that involves risks and uncertainties. All statements, other than statements of historical

1

1Q10 Results

www.evs-global.com1

May 2010Pierre L’Hoest, CEO

Jacques Galloy, CFOGeoffroy d’Oultremont, IRO

Forward Looking Information

The statements made in this presentation that are not historical facts containThe statements made in this presentation that are not historical facts contain forward-looking information that involves risks and uncertainties. All statements, other than statements of historical fact, which address EVS Group’s (“EVS”, “XDC” or the “Company”) expectations, should be considered as forward-looking statements. Such statements made by EVS are based on knowledge of the environment in which it currently operates. Because of factors beyond its control, actual results may differ materially from the expectations expressed in the forward-looking statements. Important factors that may cause actual results

www.evs-global.com2

to differ from anticipated results include, but are not limited to, financing risk, acquisition risk, changes in technology, and other risks as outlined in the filings with securities regulators and can also be found at www.evs-global.com

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Agenda

Financials

Business update

Outlook

www.evs-global.com3

Corporate

Agenda

Financials

Business update

Outlook

www.evs-global.com4

Corporate

3

Highlights 1Q10

Strategic achievements: Studio deals and new promising segments

Big events 2010: Winter Olympics, World Cup, more to come

Acquisition of OpenCube Technologies

1Q10 results:EUR 20.9 m revenue (+17% vs. 1Q09, +6% at cst exch. rates)

Operating margin of 46%

EPS of EUR 0.46 (vs 0.40 in 1Q09)

Spring order book of EUR 31.6 million at April 30 (+150%)

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EUR 22.7 million open order book

EUR 8.9 million order intake in April 2010

60% is studio

Expectations for 2010Double digit sales growth & resilient EBIT margin

3539

Quarter Revenue

Seasonal orderbook

Open orderbook Mar. 31 = EUR 22.7 million+ April order intake EUR 8.9 million

13

710

7 7

1316

97

26

13

25 2428

15

2218

29

24

35 34

913

24

16

2732

Seasonal orderbook

In EUR millions

Invoiceable in current fiscal year

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7 7 7 6 7

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q

2003 2004 2005 2006 2007 2008 2009 2010

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34.4

37.2

1Q10 revenue of EUR 20.9 million

20082007 2009 2010

6 99.8

7 39.4

7 38.6 8.5 8.7

11.9

16.6

8.7 8.1 7 8

19.7

16.4

20.121.9

24.1

19.019.9

23.324.4

27.225.4

13.6

17.818.719.620.520.9

Quarter Big Events Rentals

Quarter Revenue

Launch

Launch[IP]Director

LaunchNew studioproducts

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6.9 7.36.2 7.3 7.8

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q

2002 2003 2004 2005 2006 2007 2008 2009 2010

EUR millions

LaunchXT[2]

Geo Segment Mix 1Q101Q10 vs 1Q09 : NALA +35%, EMEA -11%, APAC +119%

20.0

NALA EMEA APAC

Revenue, EUR millions, quarterly

10.5

13.3 13.5

10.8

6.98.3

10.9

15.514.4

18.9

5.7

10.89.6

13.114.5

9.5

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q

2006 2007 2008 2009 2010

4.7 5.3

8.2

2.5

7.99.5

8.1

5.26.7 6.9

10.0

4.2 4.95.8

3.4 3.1

6.7


2006 2007 2008 2009 2010

4.93.4

2.4

5.7 5.1 5.5 5.36.5

4.3

8.67.2

3.82.1

3.3 3.1 2.84.6


2006 2007 2008 2009 2010

9.5

4.66.7

Studio ~ 63% Studio ~ 64% Studio ~ 64%

www.evs-global.com8

Traction from Winter Olympics in Vancouver

Impact from currencies

Come back of large studio projectsHD viewers take-off signs


Recovery from tough 2009Traction from Asian events from 2H 2010


5

1Q10 Revenue of EUR 20.9 millionReported

S l1Q09 4Q09 1Q10

EUR millions, IFRSActual Q1

Sales+17% vs 1Q09

Gross marginLower due to 2 large studio projects and rentals in Vancouver

EBITOpex up 19% due to higher employee count, incl. Temporary contracts

R&D 22% (i t f f t )

Revenues 17.8 20.5 20.9Cost of sales (3.0) (3.9) (4.5)Gross margin 83.0% 81.0% 78.5%

S&A (2.6) (2.6) (3.1)R&D (2.9) (3.4) (3.6)

EBIT 9.1 10.6 9.6EBIT margin 51.0% 51.7% 46.1%

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R&D up 22% (invest for future)

XDCNearing break even

EPS up 15% vs 1Q09

Exchange result (0.3) (0.1) (0.3)XDC @equity (0.8) 0.3 (0.2)XDC dilution profit - 1.3 -

Taxes (2.8) (2.9) (2.8)

Net Profit 5.4 9.4 6.3Basic EPS 0.40 0.69 0.46

1) Basic EPS is computed on the adjusted number of shares, i.e. less own shares

1)

Breakdown of +0.9m net result variance

1Q10 net profit of EUR 6.3 million, +0.9m

1Q10 – EUR millions

Highlights

5 4

1.6-0.4 -0.6

-0.0 -0.1 -0.2

5.7

0.6

6.3

Net Result

Higher gross profit

19% Opex growth

Stable taxes as a result of

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5.4 5.7better geographical mix

Improving XDC

6

2010 : the take-off year

Stakeholders funding

Market Events Corporate Events

XDC European leader DC service15.9m€ loan + warrantsExecuted Feb 10, 2010EVS 41.3% but 30.2% fully diluted

6 major studios VPF deals

Fortis KBC ING Consortium Scalable > 50m€ credit facility

130 staff

1.600+ committed digi.screensAgnostic for projectorsService oriented

To distributorsTo exhibitors


FTT acquisitionVertical integrationDE, Ö, CH, NL, PL, HUN33m€ additional revenuesAdd. 50 staff

3D boostTrigger to go digitalAccelerates deploymentTicket price sensitivity

Contribution of EUR -0.2 millionto EVS Group over 1Q10

XDC 100% 1Q09 1Q10

1Q10 Income Statement Leading EU deployment

in millions of EUR

Revenue 1.7 9.9

EBITDA -0.1 1.3

Net result -1.7 -0.5

41.3% affiliate of EVS since

31/12/09

Sales multiplied by 5 !

First quarter of FTT consolidation


EVS share x 47.2% x 41.3%

XDC contribution -0.8 -0.2

Nearing break-even point

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Mar. 31, 2010 Balance Sheet

EVS strong balance sheet at 31/03EUR 36.6 cash on the balance sheet

Highlights

Equity = 76% of total B/S

94,472 own shares (offset equity)

Cash = 42% of assets: short term deposits

Dividend = 34mJun09 = 20 m (1 48 p sh )

XDC, 6.5

Working Capital,

31.6 Net equity, 65.7

Building, 11.7

Total: 86.4 Total: 86.4


Jun09 20 m (1.48 p.sh.)Nov09 = 14 m (1.00 p.sh.)

DSO ~70 days

Net Wking Capital = 1.5 sales month

Cash, 36.6Working Capital,

19.1

LT debt, 1.6

Assets Liabilities

Agenda

Financials

Business update

Outlook


Corporate

8

Our Focus in 2010 : 4 strategic axes

Consolidation of our position in OB vansXT[2]+ / Xtnano

EPSIO: integration of graphic tools into the broadcast serverEPSIO: integration of graphic tools into the broadcast server

Increase the potential in the studio marketConsolidation of full EVS workflows (e.g., GolTV, Sky News)

Delivery of new Panasonic codec AVC Intra in 4Q10, in preparation of 2012


Create new niches thanks to new products & solutions

Service projectsBig events (Vancouver, World Cup)

Leagues (archives, delivery systems)

NAB Trade Show

April 11-16, 2010, Las Vegas

Attendance: 88,000 registered people (more than 2009, but still below the 2008 record)

General atmosphere: recovery mode, but still cautious and looking for solutions providing efficiency

3D was a hot topic, generating a lot of questions

N j t i th i d t


No major announcement in the industry

EVS Broadcast:Active tradeshowVery positive feedback on the OpenCube acquisition

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NAB Trade Show

Growing range of servers

EVS’ 3 key messagesGrowing range of servers

XT[2], XS, XTnano

Extended open architectureinteroperability with third party tools, combined with the upcoming native support of the AVC-intra codec


Extended control on content processing IPEdit, Xedio Dispatcher and Epsio

..acquired by EVS last April 1

..at a glance

Corporate− S.A. founded in 2003, by Benoit Février & Cie− Head offices in Toulouse (South France)( )− 2009 sales EUR 1.4 million, profitable− Worldwide sales: France, EMEA, USA, Japan, Australia− 15 employees

Solutions for Broadcast, Post-production & Corporate Markets− Worldwide recognition for MXF expertise (SMPTE) and file-based workflows− Base Line: « Workflow Enabler » and « Open Tools & Standards »


A brand name in the industry with international blue chip customers− Broadcast: MTV, Disney, CNN, RTL, Mediaset, Canal+, France TV, TF1 etc− Post-Production: Éclair, Mikros, Teletota, Studio L’Equipe, ParkPost etc− OEM: Avid, Panasonic, Telestream, IBM, Tektronix, DVS, Digital Rapids etc− Corporate: Airbus

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HDTV and SDTV Video/IT Servers− OpenCubeHD and OpenCubeSD: video/IT servers for seamless, powerful and flexible audiovisual production

workflows; can be used as digitization gateways, ingest stations, or simple VTR replacements in a post-production environment

− OpenCubeHD 2.2 offers powerful tools for creating DCI-compliant DCPs (Digital Cinema Packages) and a KDM application including color conversion capabilities reliable Jpeg2K encoding data encryption and safe delivery It

Product Line & Know-how

application, including color conversion capabilities, reliable Jpeg2K encoding, data encryption and safe delivery It ensures full interoperability in DCP exchanges with the D-Cinema players currently on the market.

MXF Software− OpenCube MXFTk® Toolbox: set of high-performance software tools for managing the MXF (Material eXchange

Format) standard file format− Accessible via an intuitive and ergonomic graphical interface, XFConverter converts wrapper formats (such as MXF,

Quicktime, GXF and AVI) without requiring their video/audio essences to be modified and guarantees real media workflow interoperability

− XFReader: Player that runs under Windows and allows users to play back all MXF files on a display unit or SDI Video Screen

P2 Software− P2Soft HD: comprehensive solution for the ingest, viewing and editing of Panasonic P2 media files, HD or SD. It


p g g gautomatically detects production environments, such as Avid for example, and provides an upgradeable metadata support system.

Services− Consulting - Metadata Studies - Workflow Validation: Advice and expertise to ensure successful and cost-

effective migration from a video environment to IT architecture and the efficient use of metadata in production facilities and TV channels.

− Ad hoc development and product customization: As part as its services offer, OpenCube Technologies handles contract-based video and IT-related development projects. It can also customize its Servers and Toolkits to fit specific customer needs.

− MXF Training: OpenCube Technologies offers MXF training programs for companies that plan to integrate the MXF file format into their operations.

Technology partners

CaptureAcquisition Editing On-Air Archiving

Camcorders

NRCS/MAM

ArchiveServersNLE


Servers

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Complementarity with EVS


FIFA World Cup™Facts and figures

June 11th to July 11th

10 stadiums10 stadiums32 teams64 gamesProduction:− Int. Broadcast Center of 30.000 sq.m. − 2,500 people from HBS (production)− 40 journalist teams− 300+ cameras


300 cameras− Complete HD Media server (FIFA MAX) of the event− Total of 3,000 hours of production with many different

packages (feeds, clips, statistics, highlights, rushes, etc)− Expected audience: 26 Bio cumulated viewers

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FIFA World Cup™Production workflow – around 400 EVS servers

VENUES DISTRIBUTIONIBC (Studio)


120+ EVS servers

50+ EVS servers

150+ EVS servers

FIFA World Cup™Host Broadcasting over the years

1998 2002 2006 2010Match coverage 16 cameras

Incl. 4 SSM20/23 camerasIncl. 3/6 SSM

25 camerasIncl. 6 SSM+ 0 / 1 ultra motion

29/32 camerasIncl. 6 SSM& 1 / 2 ultra motion

Stereo Multi channel sound (all elements available)

Dolby 5.1& 0 / 1 cable systemDolby 5.13D production of 25 games

Feeds Match only MultifeedsIncl. turnkey programme “EBIF Show”

Same as 2002+ improved turnkey programme+ 2 player cams

Same as 2006+ mobile feed

HD Additional prod.< 40 matches6 cams

Additional prod.48 matches8 cams

All matches 25 camsMain coverage HD ready16/9

All feeds HD Ready16/9Media server HD Ready+ 25 h of daily footage

Innovations All digital LSM/SSM

Dream TeamM l i f d

HD 16/9M di / l

All HDM h D 1


LSM/SSM Multi feedsTurnkey programmeEditorial contentNetworked LSMsEmbedded audio2 countries !

Media server/tapelessCD quality commentaryUltra motion

Match Day -1Media server HDFile transfer40 ENG crewsOff-side line

Mobile - Symbolic usage of TV feeds

Integrated IBC production centre for:- Specific packages- Pan & scan

Specific mobile feedMatch + team packages

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Agenda

Financials

Business update

Outlook


Corporate

Winter Order Book at April 30EUR 31.6 million

Larger projects

EUR 31.6m

34 1

6.56.1

7.38.5

April order intake, excl. RentalsBig event rentals

BL 01/04, excl. events rentals

12.6

g p jdecreasing order book readabilityIncludes EUR 6.1m rentals for big events+ 3.4m for 2011 and beyond

+150%

31.634.1


20.3

7.3

17.05.3

2008 2009 2010

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2004-2010 evolution : Big events direct rentals..bearing in mind that EVS represents only 5-7% of global event rentals

8.49.0

Innovation

7.0

2 9

5.2

2.0

2.0

0.9

Asian events

Euro soccer championship

Soccer world cup

Winter Olympics

5.7

Remote functions

Increased speed

Time zones mgt


0.6 0.82.4

2.9

0.1

2004 2006 2008 2010

Summer Olympics

* Orders up to April 30, 2010

*

0.7

Guidance 2010 supported by big events and studio projects

2008 2010 2012 2014


Double digit growth & resilient marginsLow visibility due to economic uncertaintiesGrowing studio sales mix !Triggers are major sporting eventsAt least EUR 8.4 mio rentals relating to 2010 big events

Continued focus on product developmentsFirst big 3D TV productions

2010

15

EVS TV long term growth driversSolid fundamentals

Increasing # content distribution channelsDigital TV, Sat-TV, Cable-TV, IPTV, WebTV, DTT, VOD, Free-to-AirFrom linear to non-linear video consumption

Accelerated by SD to HD transitionOngoing from current 10-40% Broadcast HD penetration

Tapebased to tapeless transitionOngoing from current 40% servers penetration

Speedclipping production


Structured near-line archiving for post-live use

Create Near-Live Studio Mkt nicheGetting 5% of a 1bn€ market opportunity

Increasing popular SportsInternationalization, second leagues, Stadiums

Agenda

Financials

Business update

Outlook


Corporate

16

EVS shareholding as of May 10, 2010in % shares and issued warrants – based on last received shareholders statements

May 10, 2010 stock data:

Founders19.0%

Fortis IM4.2%

Cytindus2.3%

BIP2.1%

Barclays Global

Basis : 13,625,000 ordinary sharesOutstanding warrants : 124,650 @46Treasury shares : 94,472 sharesMkt Cap @40.00: EUR 545 million

Last 12 months stock data:

Standard velocity: 62% (12 months)Average daily volume:

- 33,000 shares- EUR 1.4 million

*

*


y3.1%

Treasury shares0.7%

Unidentified68.6%

Excl. block trading and transactions out of Euronext Brussels (+30%)

EVS has bought back 15,797 shares In 1Q10

* Board members

Historical returns to shareholdersEUR 1.48 proposal final dividend

Evolution of dividend,

Proposed final 2009dividend: EUR 1.48

3 00

1.20

1.20

1.481.48 1.48

0.110.16

0.47

0.160.52

0.05

Capital reimbursement

Share buyback

Final dividend (June)

Evolution of dividend, share buyback and capital reimbursement, in EUR per share 2.15

2.44

3.00

2.53


0.480.80

1.00 1.00

0.08 0.12 0.10 0.10 0.20

1.001.20

0.06 0.14 0.14 0.09

0.60

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Interim Dividend (November)

Pay out ratio*: 28.4% 27.3% 27.0% 28.7% 142.3%82.0% 82.2% 58.1% 71.0% 69.7% 126%

*: defined as gross dividend on net profit from operations, excl. XDC

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Corporate Calendar

Tuesday May 18, 2010: Combined Ordinary & Extraordinary

2010

Shareholders Meeting

Monday June 7, 2010: Postponed ExtraordinaryShareholders Meeting

Thursday August 26, 2010: 2Q10 revenue and results


Given that, since 2009, the company has advanced the publication of its half year result from September to the end of August,the management of EVS has decided to stop with the publication of its trading statement mid July.

May 18 OGM Agenda & proposals

Total Gross Dividend EUR 2.48 (pay-out 126%) Final Gross EUR 1.48 ex-date May 27, ie. EUR 20.1m

Employee profit sharing planEmployee profit sharing plan30 shares per employee, EUR 0.3m

Auditor : BDO renewal for 3 yearsBoard mandates

Ends : Cytindus SA, repr. by Michel Delloye, Chairman, after 13 years

Renew:Pierre L’Hoest (CEO), Michel Counson (CTO), founders, for 6 yearsLaurent Minguet (founder former co CEO) Francis Bodson for 1 year


Laurent Minguet (founder, former co-CEO), Francis Bodson, for 1 yearAccès Direct SA, repr by Pierre Rion, independent, for 4 years

New (CV’s available on evs-global.com):Christian Raskin, independent, for 1 year Jean-Pierre Pironnet, for 1 year

RemunerationFix annual EUR 4.000EUR 750 per attendance (EUR 1.000 for chair)

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May 18 EGM Agenda & proposals

Renewal of Authorized capital procedureSpecial reports available on evs-global.comg

Issuance of 250.000 warrants for inventoryTo be granted over future yearsSpecial reports available on evs-global.com

Cancellation of art 32 of statutesJust cleaning


Shall certainly be postponed to June 7 (quorum issue)

1Q10 Revenue of EUR 20.9 mio (+17.1%)

ConclusionsImproving trends

Studio = 64% of sales !

1Q10 EPS of EUR 0.46

Improving business trends

Spring order book of EUR 31.6 mio + EUR 3.4 million for 2011

2010: double digit growth for sales and resilient EBIT margins


Strong balance sheet

Good confidence in the future potential of the company and new niches, focus on R&D

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Contacts: Jacques GALLOY, Director & CFOGeoffroy d’OULTREMONT, IRO

Tel: +32 4 361 70 14 Fax: +32 4 361 70 89 Email: [email protected] http://www.evs-global.com

2010, Studio year


Forward Looking Information - EVS Broadcast Equipment€¦ · forward-looking information that involves risks and uncertainties. All statements, other than statements of historical

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